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The field of applied economics in which the study of the financial, organizational, issues related to the market and environmental issues generally faced by the corporations are conducted by business economics. Business economics is also known as managerial economics that explains the theories of economics and methodology to operate a business. This factor resolves the issues which are related to the concept of scarcity, product factors, distribution and consumption (Torrès, O., & Thurik, 2019). This term provides information to understand the components and functionality of a market or any economy for example supply and demand. The main focus of business economics is on the elements associated with the business operation and the way through which they relate the entire economy (Simmons, Wiklund, Levie, Bradley, & Sunny, 2019).
Concept of Opportunity Cost: It is the basic concept in business economics; in the world, there is unlimited want but for them there limited sources to fulfill them. This principle is completely based on supply and demand.
Marginal Principle Cost: While running business things or opportunities to which dealing is conducted comes under this principle. If the level of any activity will be increased then the marginal benefit will also exceed its marginal cost (Howell, 2019).
Law of Diminishing Returns: This principle is known by other names also such as diminishing returns or the principle of diminishing marginal productivity. This principle of business economics explains that the output of the production will be increased when other things are fixed. However, the rate of the increase in the production will identify ass decreasing gradually but the overall production will increase. This principle is important when the organization is thinking about its expansion. During this time through this principle, the organization will reflect that due restructuring of their business their profit is not increasing (Hesarzadeh, Bazrafshan, & Rajabalizadeh, 2019).
Principle of Voluntary Returns: According to this principle in any marketplace, the act of promoting a free exchange of goods between the seller and buyer develops trust and a better relationship. This principle is preferred mostly for conducting international trade.
Nominal Principle: It one of the most basic fundamentals of business economics; generally people do not want to face or understand the nominal value of money they show their interests for the real value of money. Their main aim behind this is the good which they can buy from the money and understand the exact worth of money in the society (Lundgren, Dam, & Scholtens, 2019).
Centralization: In every organization decision making must be conducted through the central system from top authority of the organization to individual who is working as an executive. Such decision making processes creates the positive impacts amongst the stakeholders and other member who are associated with the organization.
Equity: An organization should maintain the equity in their process and for this it the responsibility of the managers and other higher authority that they manage a transparent system between the organization and employees.
Initiative: The business organization must encourage their employees and member for taking initiative that can affect the business process and organization can achieve the objectives also it will help the employees for completing their goals and they can improve their career by completing their goals.
Work Division: It is the duty of the organization that they provide or offers their employees specific and different level of tasks to perform. Such tasks help employees to expand their skill and their effectiveness in the outcomes will also increase.
Management of Tenure: The organization will be able to gain the profit when in the business process experienced people are working. The organization must manage their experienced employees because in providing training to new employees time and cost both are required which lead to push backward in market especially when the organization are working on small scale.
The term globalization is not a new concept it is the process through which the economy of the world is reached to the next level. With the help of globalization people, companies and governments across the world get to integrate for exchanging thoughts, ideas, and strategies associated with the development of the economy (Xu, 2019). The process of globalization is accelerated with the help of different factors out of which improving trade, increase in labor, for improving technology and capital mobility are important. The increasing interdependence among the national economies around the globe is also explained as Economic globalization with the help of increasing movement at cross borders related to goods, services, technologies, and capital. The globalization is analyzed as a positive as well as the negative process by depending upon the paradigm (Schmitter, 2019). There are various reasons which lead to the rise of globalization and they are mentioned below:
The impact of globalization can be analyzed in any country where it is implemented. According to the concept of globalization, the whole world is considered a single market in terms of production, consuming goods and response towards similar impulses. The output obtained from the globalization cannot be ignored at the global level. Foreign Direct Investment (FDI) is exploded when it increased in the developing countries from $ 2.2 billion in the year 1970 to $154 billion in 1994 (Ijeoma, & Ike, 2019). Due to this the capital of the national market increased and get integrated as a result the investment reached $ 1.3 trillion across the world every day. With the help of this process, the savings of the international capital can be transferred from any country where the marginal capital product is low to the country where it is high so that the output of the world gets increased (Zaidi, Zafar, Shahbaz, & Hou, 2019).
Globalization is helping the poor countries for exporting the labor extensive goods such as garments to the countries where the labor is not skilled with such abilities. Hence through this, the demand for unskilled labor will increase in poor countries rather than rich countries. Every country is getting the advantage of improving their technology through globalization, it is creating new opportunities within the country and then it is exported to other countries. However, some disadvantages can also be observed through globalization to expose themselves the East Asians pushed towards the economic crisis due to huge debt. Apart from a serious issue of terrorism arise in front of the world due to globalization (Mohanty, 2019).
Hesarzadeh, R., Bazrafshan, A., & Rajabalizadeh, J. (2019). Financial reporting readability: Managerial choices versus firm fundamentals. Spanish Journal of Finance and Accounting/Revista Española de Financiación y Contabilidad, 1-31.
Howell, A. (2019). Ethnic entrepreneurship, initial financing, and business performance in China. Small Business Economics, 52(3), 697-712.
Ijeoma, M. M., & Ike, R. (2019). Effect of Globalization on the Development of Civil Society Organization in Nigeria. Development, 8(1), 1-16.
Lundgren, T., Dam, L., & Scholtens, B. (2019). Sustainable Business Practices—An Environmental Economics Perspective. In Challenges in Managing Sustainable Business (pp. 205-229). Palgrave Macmillan, Cham.
Mohanty, S. (2019). Restructuring and Globalization of Telecommunications Industry. In Handbook of Research on Corporate Restructuring and Globalization, pp. 52-72.
Nair, S., & Blomquist, T. (2019). Failure prevention and management in business incubation: practices towards a scalable business model. Technology Analysis & Strategic Management, 31(3), 266-278.
Schmitter, P. C. (2019). ‘Real-Existing’Democracy and Its Discontents: Sources, Conditions, Causes, Symptoms, and Prospects. Chinese Political Science Review, 4(2), 149-163.
Simmons, S. A., Wiklund, J., Levie, J., Bradley, S. W., & Sunny, S. A. (2019). Gender gaps and reentry into entrepreneurial ecosystems after business failure. Small Business Economics, 53(2), 517-531.
Torrès, O., & Thurik, R. (2019). Small business owners and health. Small Business Economics, 53(2), 311-321.
Xu, F. (2019). Dissemination and Inheritance of Wushu Spirit in The Context of Cultural Globalization and it Social Environment. Ekoloji, 28(107), 2767-2772.
Zaidi, S. A. H., Zafar, M. W., Shahbaz, M., & Hou, F. (2019). Dynamic linkages between globalization, financial development, and carbon emissions: Evidence from Asia Pacific Economic Cooperation countries. Journal of Cleaner Production, 228, 533-543.
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